China Tackles One-Child Policy, Death Penalty, & Labor Camps

China has released the resolution detailing the CCP Central Committee’s major decisions at the Third Plenum, which was held from Saturday to Tuesday.

Interestingly, initial reports from the state media highlight mostly social reform issues, some expected some less so. One of the expected decisions is that China has decided to ease its one-child policy, which since the early 1980s has restricted urban couples to one child while allowing some rural couples have two children. The new policy will allow couples have two children as long as one of parents was an only child themselves. The Xinhua report suggested that this policy will continue to be tinkered with to support the CCP’s population goals.

Changes to the one-child policy were widely expected since March when the National People’s Congress broke up the National Population and Family Planning Commission, the agency that has enforced the one-child policy. The one-child policy has led to extreme imbalances in China’s population including a rapidly gaining population that will strain the country’s social safety net in the years ahead.

Other social reforms decided upon at the Third Plenum include law and order issues. For instance, the CCP Central Committee has decided to abolish China’s labor camps. Throughout 2013 there were reports that Xi Jinping and the Politburo Standing Committee members—many of whom were condemned to forced labor during the Cultural Revolution—were preparing to end the use of labor camps. However, these expectations were called into question last week when Reuters reported that conservatives within the CCP had blocked Xi from acting on this policy. This report appears to have been inaccurate.

Another law and order issue addressed in the decisions resolution is the death penalty. Although China doesn’t release official figures on the number of state executions it carries out, most outside estimates say that China puts more people to death each year then the rest of the world combined. Crimes punishable by death in China include drug trafficking and, according to some reports this year, possibly polluting.

According to Xinhua, the CCP’s Third Plenum decision document says that China will reduce the number of crimes subject to the death penalty “step by step.” This, however, is consistent with prevailing trends in which China has put less people and stopped carrying out executions for certain crimes.

Xinhua also reported, citing the decisions resolution, that “the country will work to ban extorting confessions through torture and physical abuse.” It did not specify if this would extend to the Party’s own internal discipline body, which is widely believed to use torture in its interrogations of Party members expected of wrong doing.

Most surprisingly, at least among the social reform issues, the Third Plenum decision document apparently calls for bringing the constitution to a “new level” and says that no organization or person is above it. The CCP currently does not consider itself bound by the constitution. There has been a growing push for constitutionalism among liberal-minded Chinese this year. It’s unclear if the CCP is merely pandering to these constituents or actually intends to enforce the constitution to a greater degree; for example, by forcing some local leaders to abide by it.

Not all issues reported on by Xinhua were social in nature. For example, Xinhua reported that the Third Plenum document says that Beijing will “open up the banking sector wider, on condition of strengthened regulation, by allowing qualified private capital to set up small- and medium-sized banks.” Truly privatized banks in China are currently banned. It’s not clear how far this reform will go given the nod to only allowing “qualified private capital,” which could restrict opening banks to those with Party connections (good news for JP Morgan Chase??).

The document also apparently says that the amount of taxes State-Owned Enterprises pay on their profits will at least double by 2020. Xinhua said that the document calls for SOEs to pay 30 percent of their earnings to the government by 2020. The same report said that these SOEs currently pay between 0-15 percent. The state will also invest more assets into “public welfare SOEs,” while “natural monopolies” in industries like energy will lose of their non-essential functions. The report also cited the Railway industry as an example of where there will be more competition.

The document also apparently said that China will accelerate reform of the hukou household registration system, but it doesn’t appear to have offered much in the way of details. Another reform state media mentioned is setting up new courts to better enforce intellectual property rights.

From what could be observed from initial state media reports, it appears the CCP Central Committee mostly grabbed low-hanging fruit while announcing its intention to later reform some of the harder issues. Xi’s ability to implement these latter reforms will therefore be crucial. As previously noted, there are some reasons for optimism, but the current Chinese leadership’s predecessors set down markers for reforms at the beginning of their tenure, which were never acted upon.